Welcome to the First Quarter 2014 Bunge Earnings Conference Call. My name is Loraine, and I'll be your operator for today's call. [Operator Instructions] Please note that this conference is being recorded. I will now turn the call over to Mr. Mark Haden. Mr. Haden, you may begin.

Thank you, Loraine. And thank you, everyone for joining us this morning. Before we get started, I want to inform you that we have prepared a slide presentation to accompany our discussion. It can be found in the investor section of our website at www.bunge.com, under Investor Presentations. Reconciliations of non-GAAP measures disclosed verbally on this conference call to the most directly comparable GAAP financial measure are posted on our website in the Investor section. I'd like to direct you to Slide 2 and remind you that today's presentation includes forward-looking statements that reflect Bunge's current views with respect to future events, financial performance and industry conditions. These forward-looking statements are subject to various risks and uncertainties. Bunge has provided additional information and its reports on file with the SEC, concerning factors that could cause actual results to differ materially from those contained in this presentation, and encourages you to review these factors. Participating on the call this morning are Soren Schroder, Chief Executive Officer; and Drew Burke, Chief Financial Officer. I'll now turn the call over to Soren.

Good morning, and welcome. The first quarter was slower than expected, but our outlook for the remainder of the year is positive. Agribusiness should perform well. The global environment is solid, with growth in trading and demand for our oilseeds and grains. Food & ingredients, which performed as expected in the first quarter, should demonstrate sequential improvement throughout the year and deliver another record result. And despite the weak start in sugar & bioenergy, we project that we will reach break even to slightly positive EBIT for the year and fund all segment CapEx from operations. The strategic review of the sugar milling business is progressing and options lie ahead to improve our position in this segment and returns for shareholders. Overall, we are confident that on a combined basis, agribusiness and food & ingredients will generate a 2014 return on invested capital at 1.5 percentage points above our weighted average cost of capital of 7%. So we expect significantly higher results during the rest of the year, particularly in the second half. There's no change to our stated objective of generating overall returns at 2% above cost of capital in 2015. Now let me review some specifics from the quarter starting with agribusiness. We're particularly pleased with our performance in Brazil, where our assets and our commercial strategies performed exceptionally, but we faced headwinds in other areas. The primary negative variances versus last year were related to risk management, income in grains, above-market ocean freight cost in our distribution business and the poor crushing environment in China. Our overall grain volume was in line with expectations, but we expected a lower price environment, particularly for wheat, which did not materialize. Political turmoil in the Black Sea and deteriorating winter wheat conditions in the U.S. were the primary catalyst for…

Thanks, Soren. Let's turn to Page 3 in the earnings guidance [ph]. As Soren said, we had a disappointing start to the year, with total segment EBIT adjusted on $75 million versus $260 million in the prior year. Net income attributable to Bunge was a loss of $13 million versus a profit of $180 million in the prior year. And income per share from continuing operations adjusted was a loss of $0.12 a share versus a profit of $1.15 in the prior year. In agribusiness, adjusted EBIT was $79 million versus a prior year of $175 million. Our oilseed processing businesses performed well and above-prior year with strong margins in Europe, Brazil and the United States. Our China crush business had a difficult quarter as margins were depressed due to an oversupply of beans in the country. Grain origination results were above prior year or mixed across geographies. Brazil outperformed with the arrival of the new crop and excellent execution, particularly in logistics. North America performed below prior-year, mainly due to logistical issues with the railroads. Our grains trading & distribution business had a difficult quarter with results well below prior year. Our commercial and risk management strategies anticipated a declining price environment that did not materialize. Instead, prices increased due to deteriorating U.S. winter wheat weather conditions and the political disruptions in the Black Sea eroding margins. Our business was repositioned during the quarter. Additionally, our ocean freight costs were high in the quarter. In order to manage the logistics around our global commodity flows, we operate a fleet of vessels under time charters. Accounting practice does not allow us to mark those charters to market and therefore, we may, on occasion, have vessels with higher rates, which are applied against commodity sales with lower freight rates, thereby creating…

[Operator Instructions] And our first question comes from Ann Duignan from JPMorgan Bank. Ann P. Duignan - JP Morgan Chase & Co, Research Division: It's Ann Duignan here. I'm going to ask you the same question that I asked ADM the other day, and that's around the whole growth in on farm storage capacity and the U.S. and the power that the U.S. farmers now have versus historically. Do you see that as a secular trend and something you're going to have to battle against every year, whether it's fall that they don't sell as much of their crop or going into harvest, they have too much crop and you can make some money on the basis -- just ahead of harvest. If you would just talk about how the fundamentals are changing with on farm storage capacity in the U.S?

Yes, I think, it's clear that certainly within the last year and probably this year that fact has had a negative impact on overall margins in the grain chain. I think it will take another year, another good crop for that to reverse. It really only had 1 good crop after 2 or 3 really poor ones to replenish supplies and pipelines are still relatively empty. So I think you'll have a normalization of margins, assuming we get another good crop. But in general, the trend towards farmers having more control in managing their own price risk, as they become bigger and more sophisticated, I think is undeniable. Ann P. Duignan - JP Morgan Chase & Co, Research Division: Okay. And I agree with you on that. And then, can you talk about on the operating side the productivity improvements. I mean, how are you going about that? Are you benchmarking against best-in-class Bunge, best-in-class food processing, best-in-class processing industries globally? How are you going about that? And how do we get comfortable with the fact that coming out of all of this we will have a Bunge best in class in terms of productivity and costs, things you can manage?

Yes, I think, as the year progresses and we advance in these programs, we should be able to share some of these KPIs with you. We do want to make sure we've got the right ones and that we've got enough data that is credible. Each segment has its own particular approach. In sugar & bioenergy, our benchmarking is mostly against the industry in Brazil, where there is a lot of public data available. But it is also within our own sugar assets. We have absolutely some of the best-in-class assets in our portfolio, so we can compare both. But there's plenty of industry data available to give you that benchmarking and comparison. In agribusiness, our focus is really on our global crushing plants, both soy and soft seeds, as well as logistics. Most of the benchmarking there is admittedly internal. But we also believe that we do have, within the Bunge portfolio, some of the best plants in the world. And logistics is something that is close to us. Food & ingredients, we are doing some external benchmarking. But again, most of the benchmarking is created from within Bunge. And the process, I would say in food & ingredients, is more advanced than in any of the other segments and very much focused on plants, operations and supply chain at this point.

And to add to that, just to explain how we look at internal versus external data. The external data is very helpful for is to set targets and establish a broad program of where we want to go and where we think the best-in-class companies are. When we get down to detailed action plans and detailed actions to define a specific goal, our best sources are internal benchmarking. We operate in a lot of similar plants. Plus publicly, it is not always available when energy consumption is in the crush plant from our competitors. We do know that from every one of our plants around the world and compare those numbers and developed plans to bring those that are not at best-in-class to that point. So it's a mix of the 2, but the details of the program are often better run off of our own internal data. Ann P. Duignan - JP Morgan Chase & Co, Research Division: Okay. And where are we would you say in the whole process if you were to use like a baseball analogy? And then I'll get back in line. What inning are we in?

I'm probably not the right person to ask baseball questions to. Ann P. Duignan - JP Morgan Chase & Co, Research Division: No, I'm not the right one to be asking either.

But I'd say in food & ingredients, on a scale of 1 to 10, 10 being the end state, we are probably somewhere around a 5 and a 6. In agribusiness, I would say probably around the same. And in sugar, I would say we were probably a little bit more advanced.

And our next question comes from Adam Samuelson from Goldman Sachs.

Just some questions on the guidance of ROIC of 150 basis points over WACC for the agribusiness and food & ingredients business for the rest of the year. My rough bag of [indiscernible] math says that implies about $300 million and $330 million of non-sugar no front [ph] or about $450 million of nonsugar EBIT per quarter. And would get me EPS somewhere $6.25 to $6.50 range. Does that math strike you as reasonable? And if this, can talk about kind of confidence in achieving those levels of profitability in the agribusiness segments over the balance of the year?

Adam, as you know, we don't give guidance. I want to be a little bit careful here, a. And b, when we run this, partly and particularly in agribusiness, one of the key decisions for us is how much to invest in working capital. That is not a fixed number or just a matter of optimizing the number of days. It's what businesses do we want to participate in or what rate of return are they bringing. That is only to say we run the scenario at a number of net asset levels based on how aggressively we will be able to invest in working capital and we won't. Having said that, your numbers are in a range of possibilities that could eventuate as a way to get there. But I don't want to say it's the most likely case and the only case. There are cases with better asset management than that, that may end up with a little bit lower of a EPS but get you to a higher return based on what the market gives us an opportunity to do.

Okay. That's helpful. And then maybe on the quarter, I know in the prepared remarks there was some color on the components of the performance. But maybe anyway to quantify some of the relative sizing of the impacts on the -- from the merchandising activities in China and China soy crush? And the magnitude of those hits to the quarter?

Yes, I mean, I think we should talk about it as being variants to what we would consider to be a normal Q1 or last year for that matter. And within agribusiness specifically, we would say about $140 million of variance is explained by the 3 areas that are highlighted in the release. China accounting for approximately $30 million. Ocean freight roughly $50 million and the balance is a variance in risk income in our grains business of roughly $60 million. So that's the order of magnitude.

That's very helpful. And then lastly for me, just, can you give some more color on the outlook on the China soy crush environment? And why you're so confident that, that market will return to profitability in the second half of the year?

Yes, shipments have begun to slow down. That's number 1. Domestic margins have recovered some as has demand, particularly for poultry. So I think Q2 will be a transition from what was admittedly a very dark place in crush margins in the first quarter. So by the time we get into July, August and we have reduced pipelines and demand for protein in China has normalized, I think we'll return to reasonable margins. Probably margins that are similar to what we had last year in the second half of the year.

And our next question comes from Vincent Andrews from Morgan Stanley. And our next question comes from Michael Cox from Piper Jaffray.

My first question is on working capital. I was wondering if you could give an outlook just to the extent your able on thoughts for working capital through the course of the year?

I covered it a little bit earlier. As we go through the course of the year, if you look at our numbers, you see a normal seasonal pattern that follows the harvest. So the fact that we would have an outflow in the first quarter is not unusual. A lot of farmers in the U.S. defer receded cash for their grains from the third and fourth quarters into the first quarter for tax purposes. So we usually have that flow and then we start the purchases in Brazil and South America. So the first quarter number was not unusual. As we move through the rest of the year, there's 2 factors that define it. One is we do have a tight working capital management to use as little working capital on normal operations as we can, particularly in our processing of businesses. But secondly, it is an ongoing capital allocation decision that we make, where if we were to invest in additional businesses, are the margins and returns in that business high enough or not to have us increase our investment, or are they low enough that we should decrease our investment of working capital, and we make that decision. So it will depend a lot as to how the market plays going forward. I think if we look at inventory and receivable levels go out the rest of the year, we'd look to take 1 day or 2 off our historical levels. And other than that, it's going to depend on the investment opportunities. Having said that, our base models do not have significant builds or declines in working capital.

Okay. That's very helpful. And then just one last quick one on the PED virus, any implications to your thoughts on crush margins for the year coming off of that?

Well, it is having a negative impact on soy protein demand. Largely so far, it has been made up for in poultry. But as we get into the summer period now of crush in the U.S. I think the most important factor determining margins in the U.S. crushing industry will be the availability of soybeans. That will be the driving force behind what margins end up being. So the demand outlook is probably a little bit weak-ish, but it's the supply of soybeans that will determine how margins are this next 4 or 5 months. And it will be, in my mind, very much a repeat of last year.

And our next question comes from Tim Tiberio from Miller Tabak. Tim J. Tiberio - Miller Tabak + Co., LLC, Research Division: As we look at the sugar business, I'm just curious after a rough opening to sugar results in 2014, whether coming out of this makes you more sensitive on the valuation that you're seeking for the business or potentially accelerate your willingness to hold onto the business as you go through the sales process?

No, it doesn't really change our approach to the strategic review. That was decided quite a while ago and it is progressing according to plan. We're pleased with the progress. What happened in Q1, I think is fully explainable and we are confident that will end up reaching the same end goal at breakeven for the segment EBIT wise, as we stated at the last call and even last year. So it really doesn't play into our considerations there. Tim J. Tiberio - Miller Tabak + Co., LLC, Research Division: Okay. And is there any change in your thinking of whether Brazil will potentially bring back another increase in the blend rate in 2014?

I think it is likely there could be a small increase in the anhydrous blend. But it is unlikely that there'll be any major policy changes this side of the election in Brazil. Tim J. Tiberio - Miller Tabak + Co., LLC, Research Division: Okay. And just moving onto -- back to the oilseed business. You quantified the impact within the trading distribution. But I was just wondering how big of an impact, whether rail logistics and Canada impacted your oilseed business and how much that was related to canola?

The impact was not significant in our crushing business. It was probably more pronounced in our food business, where we did have delays in shipments as a consequence of the very bad weather and rail service. However, in Canadian business specifically, we did have a negative mark-to-market impact in our crushing business, as margins expanded through the period. I believe that I did mention that at an investor conference sometime in March as being a possible negative variance and it still is for the quarter, although it wasn't as big as it was at that time.

And our next question comes from Ken Zaslow from Bank of Montréal.

So just going back to the hedge lost, the variance was $60 million you said. Is that relative to variance or is that how much you lost? I guess, the reason I ask that is, I thought typically, you actually leak money in risk management simple loss or is that a variance relative to what you would have made last year?

That is basically the variance to what we would've made in a normal quarter.

Okay. And then if I look forward these 3 issues should be resolved. Would you consider this quarter's results, excluding those, as a better gauge of ongoing profitability? Is that a fair way of looking at it?

I think no, without giving guidance as to what Q1 will be every year from now on, I would say that a normalized Q1 for agribusiness would have been somewhere between $200 million and $250 million. And so I think if you bridge our actual results to the gap I just gave you of $140 million that's where you end up. That's where you end up. So you can explain the difference in Q1, but clearly as we move into Q2 and Q3 and certainly Q4, you would expect that the agribusiness segment performance will increase and improve from there. We're confident that it will.

Okay. And then, I think you said that you are reevaluating the share repurchase after the second quarter? What does that actually mean and why are you doing that? And why do you actually have to reevaluate? Why can't you make a decision today?

Well, it just means that we continue as we look at the capital allocation framework and determine what is the best use of the cash we're getting in from operations. And once we get through this next -- this last piece of the repurchase program, we'll look at what's next. That's all. It just means it's continuous process it doesn't stop or end. So I guess I'm basically agreeing with you.

Alright, because to me, my sense is that if you put in place a long-term share repurchase plan and hypothetically you made an acquisition or did something else, that would be a good reason to obviously change your share repurchase plan. But an ongoing share repurchase plan seems to be a very logical situation.

It could be. What's very important to remember though is that our first priority is to keep our credit rating and our balance sheet in good shape. That is why we don't want to make too many statements about what we might do at some point in the future. Commodity markets are unpredictable as we've seen this past quarter. And so you want to preserve the flexibility to adjust as we go along.

The next question is, I'm hoping it's a rogue news report. But I'm assuming that you guys would limit the size of your acquisitions to more bolt-on acquisitions given that you would like to actually get your operations in a strategically sound place before you did anything large. Is that a fair way to categorize your strategy, given you've just come into the CEO role?

We don't want to comment on any of the rumors. Whatever we do will be through the filter of our capital allocation process, making sure that whatever we do optimizes total shareholder returns in the best possible way. And that's really all I can say relative to that. We are very disciplined and very cautious and we'll go through that evaluation every time we think about doing small or big.

Okay. Well, I bet I would speak for a lot of investors that I think you should get your operations in order before you did anything large. My final question is when I think about the outlook over the next year or so, how much incremental earnings do you expect to get from your CapEx spending?

Ken, our CapEx spending would have a hurdle rate on a cash flow basis at least 1.5x usually our cost of capital. So if our cost of capital is 7%, we're talking about 10.5% plus depending on the risk we would assign to a certain project is what we would look for and that would not as applies to all of the maintenance and investments. So in rough terms, if you would expect a 10% cash return over our CapEx budget that's probably fair.

That's about right.

And our next question comes from Christine Healy from Scotiabank.

I have a couple of questions to ask you just on the sugar business. You mentioned in your comment that you've made some headcount reductions there. I was just curious, have those strictly been on the mill side of the business? Or also, are you cutting costs on the trading side too?

No, trading is not even considered in this. That's completely separate. The comment is exclusively related to our mills and our agriculture. So what's in the field and what's in the mills, that's where the headcount reduction tab and that's also where we have the largest number of people employed obviously. Our trading business is one that we feel very good about and we're very happy with the way it's structured and the talent we have in it.

Okay. So the trading business, that is meeting your return objectives. When you're doing the strategic review that's strictly on the milling side of the sugar business?

That is correct. Our view on the trading businesses and it fits Bunge's overall portfolio well. It is very similar to what activities we perform in agribusiness. It is the same logistics corridors in many ways the same customer base and the same approach to risk management. So our trading business, all else equal, is a core part of our global commodity flow business.

Okay. That's helpful. And can you talk about your operations in Ukraine and Russia and whether you've seen or expect to see any impact in the political tensions there?

We've had some periods of slowdown. But I will say in general and it's difficult to generalize in that part of the world in a moment, but really both in Russia and the domestic Ukrainian markets, activities continue more or less uninterrupted. Our domestic oil business moves along, both in Russia and the Ukraine in a good way. And even port operations in Nikolayev, so exports of corn and wheat are continuing uninterrupted. So we've had some periods where farmers have held back and not sold as actively as others. But in general, given the level of political instability, operations have continued uninterrupted.

Okay. Great. And then just lastly, you didn't highlight it in your comments. But just curious if China's rejections of corn and soybean shipments, whether or not that brought some extra costs to you?

No. Really our performance in China was really just related to the actual crush environment in China, in our own facilities and we were not impacted by -- in any material way of any of the rejections that have been talked about in the wires.

And our next question comes from Diane Geissler from CLSA.

I just wanted to get some clarity on the $140 million that you called out on the 3 items in the first quarter. And just appreciate for me the accounting around freight derivative contracts. It's probably as esoteric as it comes. So I understood from your commentary that the $50 million hit from the ocean freight, is that something that you will recoup or you won't?

As you said, Diane, we're getting into some esoteric territory here. The $50 million being recuperated, it's not a one-for-one in the way the accounting works. So that $50 million will stay. But the way we think about our freight is if we would take our full freight book now, all the leases we've charted in and compared them to market, where do we stand? Are we at market, above market or below market? And right now, our freight costs are about $70 million below market. A lot of that will come in '15 and '16 though, not so much in the rest of '14. So '14 would -- kind of the rest of the year, we think, will be about pretty neutral on that basis with then the benefit coming in the second half of some of those charters we got out there, and the lighter part of the charters in '15 and '16. And then separate from that is you got the mark-to-market on the derivative that can move around in any quarter and it does come back. But again, it's not a one-to-one match. And I'm sorry for a little bit of that vagueness. It's just that the accounting rules don't fit our ocean freight business that well and could simplify why that's the case is your mark-to-mark derivatives to market, but mark-to-market your lease contracts to market. So you're marking half of the transaction in effect.

All right. And then can you just quantify for me what are the sugar start-up costs that rolled into the first quarter results that you had expected to appear in the second quarter? Is there an order of magnitude that we should think about there?

It's not precise, Diane, but somewhere in the $15 million to $20 million range would have gotten pulled forward.

Okay. And then did you comment on your -- what is your CapEx budget for the year, is that -- it's $900 million?

Yes, it's $900 million. It's the way that we described it in the last call. It hasn't changed.

Okay. So that's actually in the appendix of your slides up here. Okay, great I see it here.

And our next question comes from Robert Moskow from Credit Suisse. Robert Moskow - Crédit Suisse AG, Research Division: I was taking a look at the proxy and I noticed in the executive compensation that the board rewarded management for the $250 million gain on sale for the fertilizer business in 2013. And I guess I was a little surprised to see that because it was an economic gain on sale, but I don't normally see that in the results of companies and how boards compensate. And I was just thinking like, the sugar business is now on the block. A lot of capital has been kind of destroyed in the sugar business. So there will probably be a loss there. Maybe you can't answer this question, but how will the board treat executive compensation when that business is sold? Will they treat it the same way?

That is really up to the board and not something I can talk to you about here.

And Rob, this is Mark. I'd be happy to talk to you about the basis behind treating the fertilizer gain as it was, offline, if you would like.

And our next question comes from David Driscoll from Citi.

This is Cornell Burnette with a couple of questions on behalf of David. So the first thing -- I just want to be clear, when I listened to the comments, in terms of what the full year is going to look like, it seems that despite the rough patch that you hit in the first quarter that fundamentally your outlook for the full year is relatively unchanged. I just wanted to make sure, first of all, if I had that thought correct?

I think you're correct on that.

And then so I'm looking at it is you had kind of the $140 million negative variance in the first quarter. Basically a lot of this comes down to the fact that you're seeing I think a better environment forming in a lot of your markets over the coming quarters maybe versus what you were looking at previously. Specifically in crushing, I know that the USDA is expecting global crushings of oilseeds to increase 5% and a lot of that in '14 is driven by Brazil and South America, where the numbers are up about 9%. So I was wondering if you could just talk a little bit about what you're seeing globally in price of crushing and specifically in South America? And what type of variances you look to come out of that region versus last year, which I think was a particularly difficult year down there.

Yes, I think both in Brazil and Argentina, we expect the next probably 2 quarters to be quite good and better than we had earlier expected so go back like a few months. That is a big positive for us given our capacity both in Brazil and Argentina. And as you rightly said, Argentina last year was not really a contributor. So that should be a positive variance for us over the next couple of quarters. European soy crush, particularly Southern Europe for us, remains a very positive element. That should continue well into the summer. And in the U.S., I think we will still manage through this summer with reasonable margins and expect that Q4 like last year will be very good. China, we've talked about it. The next quarter is a transition quarter from very bad to hopefully something a little bit more reasonable and then a strong last half of the year. So overall, in balance I would say the soy crush environment looks better than we would have expected or expressed maybe a few months ago for the balance of the year. And in soft seeds, Canada is clearly the highlight. Canadian crush margins are excellent. We've got additional capacity coming on stream, as you know, with a good crop and I know that planting intention are strong. So at least acreage from Canada will be up and we should have another big canola crop. And in all likelihood very strong margins throughout the balance of this year. The same thing should be the case in New York, where I know soft seed crops, particularly rapeseeds are in good shape, they're well advanced and they're large. So soft seed crush margins, particularly rapeseed will be good and I think sunseed margins should also be good, as we get into the new crop. There is a fairly large overhang of sunseed stocks still in Eastern Europe to be commercialized. And I think they will come as farmers gain confidence about their new crop. So in general, the global crushing environment for Bunge looks very positive for the balance of the year.

And our next question comes from Matthew Korn from Barclays.

Dig a little bit deep here. Grain trading environment for China. We've seen Costco buying stakes in groups like Noble. I've seen some commentary on how that might change maybe some of the competitive dynamics for companies like Bunge, the implication that Chinese might be more self-reliant when it comes to ag commodity procurement. Would you have any concerns of any kind of structural squeeze emerging as a result of moves like this? And if not, why not?

I think -- well, China is a big market first of all, and one that is clearly sort of privatizing more and more as it's been stated by Chinese policy. And what Costco has done is fully consistent with their food security ambitions, which is to connect themselves at least for part of their supply into the global marketplace. And that's not really -- it's not really new. It's been expressed in many different ways over the last year and so now they've acted upon it. I think short-term it probably won't change much. Medium term, it could change a little bit but I'm convinced that Costco will want to remain closely connected to companies like ourselves and others. Costco is a big customer of Bunge today and I suspect that will be the case also a year from now. So I think it will be a mix of both.

All right. Also, along with China. We've seen so far this year a combination of bird flu, and depressed pork prices and the impact there in the demand side for feed and meal. I know your take's probably on the supply side that the Chinese kind of front-loaded to insure against any kind of reemergence of Brazil logistics issues. On the demand side, are there any things in particular, any things that you can point to, that give you conviction of an upturn in the second half of the year?

Other than offtake from our own crushing plants, that's typically the best way of gauging how demand is evolving both for protein and oil. And so when we look at the customers that we do business with every day and we deal directly with customers. We don't go through intermediaries in China. We can sense whether things are slowing down or speeding up. And frankly the offtake has been probably better than you would expect given the negative press around margins in China. So our team and our customers, frankly, reflect that things have probably bottomed out and are now improving again.

And last, this is more thematic, and maybe I'm thinking about this in an unsophisticated way. But the message has been, I think from you over this past year and frequently [ph] longer for years, that maybe you believe in your approach to risk management that you know you can't get all the bets correct, volatility is inherent with the operations in the business. And I know that these -- that the pain always feels more when you have particular quarters and current events like this. But you're moving seemingly to reduce volatility over a lot of the core businesses. You're getting more downstream, you sold off the fertilizer assets. Is there anything that you could do or that you would do to maybe reduce the amount of agribusiness income at risk when you have moves like this? Particularly when you have such a positive underlying environment and you see that emerging over the rest of the year. Because the concern will always be we see the trends, we see the trends of crush margins, we see the trends in flows. But there's always the aspect that, that can get lost in the noise of potential risk management working the wrong way.

I think in any given quarter, that is just a fact, and I don't think that will ever disappear entirely. That being said, we always go back and review and look and see if we could have could have done things differently or better. And we will do that in this case as well. But fundamentally, I am absolutely convinced and supportive of our process not only to economic analysis, but also risk management. It's proven, it's right and delivered good returns for really many years and many quarters. And so we are having to live with some of the volatility that is inherent quarter-on-quarter. But year in and year out, over the last many, our agribusiness risk management team and the economic analysis teams have really delivered the goods for us. And so can we improve? Yes, of course we can and we always look to do that. But I believe that we've got the right structure and the right process in place. The other way that we can -- and we are aiming at, let's say, reducing some of the risk in earnings is to grow the share of food and ingredients in Bunge. And if you say that today the share is somewhere between 20% and 23%, I think we've stated that getting to 35% is our objective. And we can do that in many different ways. Part of it is just improving what we've already got and part of it is by adding on pieces like we've done with Altex. That should help the mix overtime as well and should help reduce volatility in earnings. So, I think the combination of those 2 things will get us in a better place. But we'll never eliminate the quarter-on-quarter volatility in what is an agricultural commodity business.

And our final question comes from Vincent Andrews from Morgan Stanley.

If somebody answered this, I can just go back and read the transcript later. But I'm just wondering if you talked at all about sort of your expectation for soy crush margins, as the Argentine farmer begins to release all these pent-up beans. Are you anticipating any sort of degradation in the crush outlook?

Vincent, I think we answered it, but just a short recap. I think overall, soy crush margins for Bunge and for the balance of the year. We feel unbalance will be favorable. We feel very good about soft seed margins particularly in Canada, but also in Europe as the new crop now begins to materialize. So overall, crushing both soy and soft should be good for the last and next 3 quarters. As it relates to Argentina specifically, that should be a highlight for us over the next quarter or 2 at least. Last year, Argentina didn't contribute much, for reasons that you know. But we've got a good crop. The farmer has only commercialized roughly 20% of the beans so far. And margins are good at the moment. We should be able to secure a nice couple of quarters of soy crush in Argentina and then the real question is to what extent will the overhang of soybeans have an impact on U.S. crushing margins in the last quarter and that's just too early to tell. A lot of that will depend on the political environment in China and how farmers and the population in general looks at economic situation. All else equal, I would say chances are that there will be a fair amount of retention again in Argentina as we go into the end of the year, but it's too early to tell.

Then, maybe as a follow-up on Argentina, there's the potential obviously for a change in government there, as well as in Brazil. And I'm going to assume that either or both, you would assume would be positive for you. But could you just discuss that in any further detail?

I don't really want to comment on the politics in Argentina. But I believe the election is 2 years from now. It's not this year. It's next year.

Yes, next year.

Yes. Yes. So I don't really want to get into that. We know that our business is important to both countries. And we feel comfortable operating in virtually any environment.

I would now turn the call back to Mr. Mark Haden for closing remarks.

Thank you, Loraine. And thank you everyone else for joining us this morning.

Thank you. And thank you, ladies and gentlemen. This concludes today's conference. Thank you for participating. You may now disconnect.